International Financial Reporting Standards

International Financial Reporting Standards (IFRS) is the framework used by most developed countries today and has growing support in the United States.

EDUCATION & TRAINING | WHY GLOBAL STANDARDS? | KEY PLAYERS

Recent IFRS News

FASB & IASB propose revenue recognition solution
FASB and the International Accounting Standards Board (IASB) proposed a joint approach for revenue recognition in a new discussion paper. Revenue recognition is one of the most significant differences between U.S. GAAP and the International Financial Reporting Standards (IFRS).

CPAs show growing acceptance of IFRS
The U.S. accounting profession increasingly believes that international accounting standards will be implemented in the U.S. and is beginning to prepare for a change in standards, according to a new survey from the AICPA.

New AICPA chair sees compromise on IFRS, challenges to accounting pipeline
“When we are done, I think IFRS will be a little bit more rules-based and the U.S. will be a little bit more principles-based,” said Ernie Almonte, CPA, the newly elected AICPA chair. “Both sides are going to have to give a little and compromise.” Almonte joined The Ohio Society’s Council of Leaders and Executive Board at their fall meeting and shared his thoughts on the major issues facing the profession, including International Financial Reporting Standards (IFRS).

• U.S. & European companies agree on IFRS quality, but disagree on regulator’s processes
• IASB revises IFRS 1
• SEC publishes IFRS roadmap for 90-day review
• FASB and IASB target 2011 as date for major joint project completion
• FASB & IASB select co-chairs for global crisis advisory group
• U.S. businesses not rushing to get ready for IFRS
• IASB issues fair value alert, permits reclassifications for IFRS issuers
• International standards board responds to current credit crisis
• Going Global: IFRS set to become the gold standard for accounting
  Featured in the May/June 2008 issue of Catalyst
• Within a few years, the SEC may designate a date for mandatory adoption of IFRS by all U.S. public companies (from CFODirect.com)

Education and Training

Current Status

The SEC is publishing for comment a proposed roadmap for adoption of International Financial Reporting Standards (IFRS) by U.S. public issuers that file with the SEC. The outline sets a tentative effective date for 2014 for mandatory filings using IFRS. In 2011, the SEC could determine when and if to make a mandatory requirement for filing using IFRS. Should the decision to mandate IFRS in 2014 be made, the SEC could open the window for more early adopters to begin filing using IFRS.

Why move towards an international set of accounting standards?

We are increasingly becoming a global society as businesses of all shapes and sizes find opportunities to compete in international markets.  The U.S. financial reporting environment is incredibly complex and businesses are increasingly seeking diverse sources of capital. IFRS is a commonly accepted standard in much of the world and provides a high-quality principles-based platform that retains transparency, reduces the complexity and encourages use of professional judgment.

More than 100 countries have adopted IFRS, with India being the most recent. India plans to adopt the standards by 2011. Japan, Canada and South Korea are expected to soon follow suit. India continues to grow as a leader for outsourcing destination, in particular for finance and accounting responsibilities and their support for IFRS is even more important to the global movement.

Who are the key players?

AICPA: The AICPA Council designated the International Accounting Standards Board (IASB) in London as an accounting body for purposes of establishing international financial accounting and reporting principles. FASB will continue to set standards in the U.S. AICPA has now designated four bodies to promulgate accounting standards: IASB, FASB, GASB, and FASAB. The AICPA has developed an IFRS Web site for more extensive resources about IFRS.

SEC: The SEC is publishing for comment a proposed roadmap for adoption of IFRS with a potential effective date of 2014 for mandatory filings using IFRS. The SEC also recently unveiled "IDEA" – the new interactive XBRL database, the successor to EDGAR.

FASB: The Financial Accounting Standards Board believes that investors would be better served if all U.S. public companies used accounting standards promulgated by a single global standard setter as the basis for preparing their financial reports. (From FASB/FAF comment letter on allowing U.S. registrants to use IFRS and the proposal release to eliminate the requirement for certain foreign filers to reconcile to U.S. GAAP.) Current FASB Chair Robert Herz gave an interview with the Journal of Accountancy in February. During this interview, he spoke very frankly about international convergence of standards and the future of FASB.

IASB: The International Accounting Standards Board develops IFRS. It is highly possible that a move to IFRS requires acceptance of the IASB as the global standards setter. The AICPA officially recognized the IASB as an accounting body for purposes of establishing international financial accounting and reporting principles.

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